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The Real Cost of Flood Damage

Updated: Sep 29

According to statistics from NOAA’s National Centers for Environmental Information regarding billion-dollar weather and climate related events from 2019-2020, flooding was the most devastating type of weather event. Floods cost Americans more than $20 billion. As the most common and costly natural disaster in the U.S., flooding even at the lowest level of severity can cost tens of thousands of dollars.

FEMA broke out the average costs of floods in detail in a chart of estimated flood loss potential. For an average-sized 2,000 square foot home with possessions of $50,000, just one inch of water could cost nearly $27,000, five inches of water just over $45,000, and 48 inches of water more than $103,000. For a large home of roughly 5,000 square feet with $100,000 in possessions, one inch of water damage could cost more than $53,000, while 48 inches of water could cost north of $200,000.

Despite these alarming numbers, only a small percentage of Americans have flood insurance – according to a 2018 Insurance Information Institute survey only 15 percent of homeowners carry flood policies. Many homeowners do not believe they are at risk of flooding or mistakenly believe they have flood coverage through their homeowners policies. Still, others think federal disaster aid will assist them if their property should be flooded.

Unfortunately, outdated flood maps are giving some a false sense of security, and that prevents many businesses and homeowners from taking the time to understand the true cost of flooding. For those relying on disaster assistance from FEMA instead of purchasing flood insurance, they should understand this: most federal disaster assistance comes in the form of low-interest loans, rather than grants, and recent disaster payouts after Hurricane Harvey averaged only $4,300, according to POLITICO.

We should also keep in mind that crisis response could be particularly challenging for FEMA this year, as a result of added pressure on the agency due to COVID-19. So, how much does a flood cost? Probably more than you ever imagined. Homeowners and business owners should understand their flood risk exposure before they get soaked, especially now in these unprecedented times.


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